BRUSSELS—The European Union hit back against China’s targeting of one of the bloc’s smallest members over its ties to Taiwan, opening a new front in the global battle over Beijing’s use of economic pressure to advance political objectives.

The EU said Thursday that it had launched a case against China at the World Trade Organization over alleged trade restrictions that were imposed on Lithuania after the small Baltic country allowed Taiwan to open a representative office in Vilnius under a name that suggests it is separate from China.